9/22/2014

Why does the NY Times Editorial Criticize Venezuela’s Maduro?

The NY Times criticized Venezuela´s dictator, Nicolás Maduro, in an editorial,  "Venezuela’s Crackdown on Opposition¨. Venezuela has been undergoing a tragic black comedy since 1999, when Hugo Chávez took power after deceiving the people as to his true political beliefs. The New York times editorial tries to summarize recent events. But it leaves out the ugly details...

When he took over in 1999, Chávez´political beliefs seem to have mirrored Fidel Castro´s (he never hid his admiration for the Cuban dictator). 

The early planning  days: Fidel Castro 
greets Hugo Chavez in Havana (elmundo.es) 

Fidel´s ideas in turn have been changing over time. The Soviet Union´s fall, China´s conversion to a fascistoid state/corporatist/capitalist entity with very high inequality, the rejection of communism by Eastern Europeans and Russians, and the inability by some of his former communist allies (Vietnam, Angola)  to implement the communist utopian state must have had an impact.


Chávez and Fidel shared a dream: to merge Cuba and Venezuela as a single nation. Given Chávez´ambitions, Fidel must have convinced him to go along with what amounted to a slow motion take over of Venezuela,  by Cuban secret police and military personnel,  promising him the top post in the newly merged entity.

The Cuban plan required acquiescence by a large sector of the Venezuelan military and security machine. This aquiescence was bought by creating the conditions for a huge surge in crime and corruption.  

The crime wave created the conditions of anarchy needed to allow the murder of targeted individuals as needed (“the poor guy was mugged for his cell phone”). The corruption allowed the Cubans to “get the goods” on senior military officers who became involved in the drug trade, the smuggling of price controlled gasoline to Colombia, and money laundering activities using cheap dollars they obtained via the government´s foreign exchange control agency (CADIVI) to play in the currency black market*.

The plan seemed to be marching along quite well. They had a “dial a result” electronic voting system, a partially muzzled media, overwhelming control of the airwaves to push government propaganda, and supportive left wing “progressives” who swoon whenever they see a Latin American caudillo emerge. 

Sean Penn and Hugo Chávez in a mutual ass kissing session 

The USA and European left are quite supportive of whatever shows up provided the ruler is autocratic, populist, quotes Marx, and sends them money.

So there you are, Fidel´s recipe as it evolved in the 1990´s. What Fidel didn´t count on was his age and mental deterioration (Fidel´s brain is fried, they are faking his health condition). 

Fidel Castro after his brain turned to mush

They also failed to account for PDVSA´s inability to produce oil efficiently. I like to point to Rafael Ramirez as the man who knocked off the Bolivarian revolution due to his sheer incompetence. However, the truth is that poor Rafael is an opportunist who got promoted too fast, and no matter who was in charge Venezuela´s PDVSA would have gone to hell because Chávez and the Cubans provided the strategic guidance and management control.

Anybody who follows Venezuela´s economic mess knows very well today PDVSA´s oil production is dropping, they are unable to reverse the decline, their oil quality is so bad they are now seeking to import crudes to blend with the Venezuelan crudes to “disguise” them, and there´s a serious cash flow problem which could cause a bond default (for the bond debacle see the discussions at “The Devil´s Excrement”   http://devilsexcrement.com/   blog by Miguel Octavio).

Fidel´s younger brother, Raul Castro, took over after the old man´s brain fizzed out. Raul is primarily a military man who likes to place his guys in key positions, and appears to prefer a Chinese style fascistoid regime. But Raul´s life got complicated when Chávez got cancer and eventually died in Havana sometime in late December 2012 (officially he died in early 2013, but it appears he went brain dead much earlier). Chávez heir, Nicolás Maduro, is a long time Cuban informant and mole. This made him an ideal candidate to replace Chávez, even though his education, charisma, and speaking abilities were zilch.  

Maduro receives instructions from Raul Castro

Maduro, advised by Cuban handlers, took over the country in early 2013, and has gone ahead and implemented both harsh repressive moves, more media censorship, and an incredibly stupid economic management style. This in turn has increased inflation from 20 % in 2012 to over 60 % today. It has also caused long food lines, medicine shortages, and has led to a recession.

 Today Venezuela has much higher unemployment as well as increasing poverty. And Maduro´s only response seems to be increasing repression and a constant barrage of lies blaming the middle class (middle class Venezuelans must be feeling like Spanish  Jews in the late 15th century). The high crime rate, the lawlessness, corruption, and the media censorship led to very intense protests this year. These were met by the Venezuelan military with harsh repressive measures. So today the protest movement continues, but it´s weaker. 

Leopoldo Lopez (in white t shirt) being led to
 jail after leading peaceful protest in Caracas

Opposition leaders such as Leopoldo Lopez have been jailed, and the rest have been silenced. And as a result there´s a flow of middle class and professional Venezuelans fleeing the country. This brain drain will eventually have serious consequences, but right now the economy is doing so poorly nothing really makes a difference.  I think this is the end of Venezuela.

And so I sit here scratching my head and wondering why the Obama administration seems to be more focused on Ukraine and starting a war with Russia than in trying to solve the problem posed by Cuba´s colonization of Venezuela.

I guess the Obama administration must be full of “progressives” who do look the other way. And this explains the administration´s foreign policy failures. It has no moral compass, no defined strategy, and it seems it spends it times plugging holes in the dike rather than thinking ahead.

Before Republicans (or self styled “conservatives”) start cheering, I want to remind you the Bush administration was just as bad if not a lot worse. And Clinton wasn´t that much better. US foreign policy has been a mess for a long time, and it´s likely this incompetence will continue. Nobody has the right to cheer about anything, everybody gets it wrong.

A partial quote from the NY Times editorial follows:

“The Venezuelan government early this year responded to a wave of street protests by jailing opposition leaders, deploying the army against unarmed protesters and tightening control of the media. The deplorable tactics have largely driven an inspiring opposition movement underground, depriving Venezuelans of the right to challenge a leader who has put a once-prosperous nation on a perilous track.

The imprisonment and trial of an opposition leader, Leopoldo López, show how far President Nicolás Maduro is willing to go to stave off legitimate grievances in a country he and his predecessor, Hugo Chávez, mismanaged…..”

Mr. López’s trial, which began in July, is a travesty. The indictment bizarrely contends that Mr. López, who peacefully called for Mr. Maduro’s resignation, incited violence through “subliminal” messages conveyed during public speeches demanding change that won him strong public support. The judge in the case approved more than 100 witnesses for the prosecution and rejected all but two defense witnesses¨…

“The human rights abuses and Venezuela’s ailing economy are an outgrowth of the political crisis that has gripped the country in the past decade…..”

“Mr. Maduro, lacking Mr. Chávez’s charisma and shrewd political instincts, has proved to be an even more dangerous and divisive leader. Venezuelans now suffer from shortages of basic commodities, including milk. Inflation surpassed 60 percent this summer. Leading economists have suggested that Venezuela, which has the world’s largest oil reserves, could default on its foreign debt this fall. Unable to reverse the decline, Mr. Maduro rails about foreign conspiracies and has throttled a once-free press….”

More at


*The currency blackmarket has usually run at two to three times the official controlled exchange rate. The black market quote is 95 bolivars per US dollar. The official system has three rates, 6.3 Cadivi, 10 to 15 Sicad I, and 50 Sicad II. The three rates are used to disburse bolivars to different players.
The key to the laundering racket is to get plugged into the very best rate, the 6.3 bolivars per USD Cadivi, sell a fraction of the US dollars acquired into the black market at 95, and keep the rest to deposit in an overseas account. Some of this money gets deposited in the accounts of the government officials “facilitating” access to the preferential rates. And some of it is laundered by the government itself.


The funds from the laundering carried out by the government (via its proxies), is then used to pay off politicians outside Venezuela, to finance political parties such as Podemos in Spain, to purchase corporations which in turn are used to buy privately held Venezuelan companies they have put in distress using abusive government regulations and by choking their access to imported materials they need to manufacture their products within Venezuela. 

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